Wednesday, December 28, 2011

"Plastics" To Survive, Some Biofuels Companies Give Up on Biofuels (GEVO)

Or "plasticity".
The Khosla-backed Gevo came public at $15 back in February. Given that they're based in Colorado, it's probably appropriate that the chart looks like a double black diamond run:

Last I saw, $5.63. Nice exit Mr. K.
From MIT's Technology Review:

Companies such as Gevo hope to become profitable by turning corn into chemicals.

Gevo, a prominent
advanced-biofuels company that has received millions in U.S. government
funding to develop fuels made from cellulosic sources such as grass and
wood chips, is finding that it can't use these materials if it hopes to
survive. Instead, it's going to use corn, a common source for
conventional biofuels. What's more, most of the product from its first
facility will be used for chemicals rather than fuel.

As the difficulty of producing cellulosic biofuels cheaply becomes
apparent, a growing number of advanced-biofuels companies are finding it
necessary to take creative approaches to their business, even though
that means abandoning some of their green credentials, at least
temporarily, and focusing on markets that won't have a major impact on
oil imports. This is hardly the outcome the government hoped for when it
announced cellulosic-biofuels mandates, R&D funding, and other
incentives in recent years.

Cellulosic biofuels still cost much more to produce than either corn
ethanol or gasoline. One reason is that startups have had trouble
raising enough money to build the large-scale commercial plants needed
to lower costs. That's in part because their technology is unproven, and
in part because there's no guaranteed market for cellulosic biofuels
yet....MORE

Mr. McGuire: I want to say one word to you. Just one word.

Benjamin: Yes, sir.

Mr. McGuire: Are you listening?

Benjamin: Yes, I am.

Mr. McGuire: Plastics.

Benjamin: Exactly how do you mean?

Mr. McGuire: There's a great future in plastics. Think about it. Will you think about it?